The slowdown engineered by the Reserve Bank is having an impact on retailers, large and small.
Department store group, David Jones reported last week its sales growth had slower noticeably in the third quarter and yesterday Harvey Norman, the country’s biggest consumer electronics retailer, revealed its sales growth had been hurt.
The retailer said sales for the four months to the end of April rose 6.4% on a topline basis and 2.5% on a like for like or same store basis. Sales for the 10 months through April rose 10% with revenue from stores open at least a year gaining 5.2%.
Sales revenue rose to $1.78 billion in the four months to April 30 compared to the $1.67 billion a year earlier.
In fact the growth rate in topline sales almost halved in the four months to April, compared to the first half of the year, while same store sales growth in the April four months was just a third of the rate experienced in the first half.
That’s showing the impact of the RBA’s tightening of interest rates, plus add-ons from the banks, and a fall in consumer confidence.
Harvey Norman reported in January that first half sales rose 12.4% on a topline basis, while like for like or same store sales jumped 6.9%, and in the December quarter, sales grew 13.1% on a same store basis of 7.9%.
That was an acceleration from the performance in the September quarter when sales rose 11.6% on a topline basis and 5.7% on a same store basis.
Harvey Norman usually reports sales on a quarterly basis, but this year announced revenue for 10 months to adjust for the timing of Easter, which was early this year, falling in the third quarter and in the fourth quarter of 2007.
Harvey Norman’s earnings before one off items but after tax jumped 31% to $174.14 million for the half year ended 31 December 2007 compared to $132.87 million for the half year ended 31 December 2006. That includes profit from continuing and discontinued operations, and excluded property revaluations.
Matching that strong growth this half will be tougher.
Harvey Norman shares edged a few cents higher on the news to close at $3.62. The shares are down 46% this year.
